The deal includes facilities in Mobile, Moss Point, Jacksonville, Fla., and Mayport, Fla., but not operations in Boston and Philadelphia. About 1,000 employees at the four locations will make the transfer. It's unclear how many people currently work at the Mobile location.

BAE said it would pay for the transaction using cash on hand. The deal depends on BAE winning regulatory approvals, and would close between July and September.

The deal had been rumored for weeks.

The world's second-largest defense contractor, BAE reported sales last year of 22.4 billion pounds ($36.2 billion). It has moved heavily into U.S. Navy ship repair and overhaul, winning a five-year contract to modernize 11 Arleigh Burke-class destroyers worth as much as $500 million. That work is supposed to take place in Norfolk, Va.

It has been trying to build its U.S. business. Atlantic's Jacksonville yards concentrate on repairing Navy ships, while the Mobile yard mainly repairs commercial vessels. The Mobile yard suffered a setback last year when a $124 million deal to assemble three oil tankers collapsed. The venture is currently being sorted out in bankruptcy court in New Orleans.

BAE said Atlantic had sales of $308 million last year, with earnings before interest, taxes and amortization of $38 million. The business being purchased had gross assets of $257 million at the end of 2009.

J.F. Lehman & Co. of New York bought Atlantic in 2006 for around $300 million. Lehman later added Moss Point's Millenium Industrial and Marine Solutions, and the repair yards in Boston and Philadelphia.

BAE has a 25-employee office in Gautier that provides engineering and technical support to the Navy for ships built at Northrop Grumman Corp.'s shipyards in Pascagoula and elsewhere.